GMS weekly report on Bangladesh ship breaking industry for WEEK 15 of 2011:

This past week remained an extremely busy one for Cash Buyers and their local sales agents, in terms of getting their vessels cleared inward, negotiating L/Cs, and getting deliveries squared away. Consequently/ the local port position saw a wave of incoming tonnage that has been lying in wait outside, ever since Cash Buyers picked up a horde of ships in early March, when the news of the opening of the Bangladeshi market originally surfaced.

As such, ship breakers saw in excess of 213,000 LDT and 18 ships make their way towards inner anchorage, ready to be beached. But, with the first tide of April just being missed, only 1 vessel had actually hit the beach as the working week ended. While more beachings are expected to take place by the time the next edition of the GMS WEEKLY is put together, we do anticipate even more fresh arrivals locally.

This surplus of incoming vessels is likely to be the leading cause of ship recycler lethargy (in terms of pursuing fresh tonnage). Several vessels that could have clearly been committed to the local market wall in fact continue to sail onwards, to India / Pakistan, as the local buyers were not keen to offer aggressive figures.

Another (potential) reason being blamed for the lack of aggressive negotiations from Chittagong is the uncertainty of how soon before local recyclers get permission to assume cutting activities on existing deliveries, since most recyclers wish to wait and see the fate of ongoing deliveries.

Notwithstanding, we do expect more clarity to emerge and (perhaps) a more aggressive attitude from local recyclers to come around over the coming weeks.

Source: SteelGuru. (Sourced from GMS Weekly.com). Tuesday, 19 April 2011

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